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George Osborne: Building a Green Technology Recovery

I’d like to thank John Alker and the Green Building Council for hosting today’s event.

John, I know you’ve been working closely with Greg Clark and his team, and we’re grateful to you for your help and expertise.

We meet here today with Britain in the teeth of a recession deeper even than that of the US.

And we meet with less than a week to go before the Budget, when the Chancellor has a vital opportunity to help those hit hardest by Labour’s recession.

The savers and pensioners whose income has been drastically reduced by successive interest rate cuts.

And, of course, all those people who have lost their jobs as unemployment rises faster than at any point since records began.

They are our priority – and should be the Government’s too.

But the Budget is not just an opportunity to help people now.

It’s also a chance to chart a new course for the future.

That’s why we were so critical of the temporary VAT cut announced in last November’s Pre-Budget Report.

Because we recognised that it would be ineffective in the short-term, and by racking up yet more debts, detrimental for the long-term.

This cannot be allowed to happen again.

What’s needed in next week’s Budget are policies that will not only help today, but also help tomorrow.

Because of course there will be an economic recovery at some point.

All recessions end sooner or later.

The fundamental question for all of us is this: what kind of recovery will we have?

Do we simply go back to the way things were over the last ten years where we built an economy on debt and we relied on housing, finance and government spending for our growth?

Or will we put down broader and deeper roots, with prosperity generated across multiple industries, and from every region of the country?

Do we simply reflate the debt bubble and build the economy on sand once again?

Or will we replace Labour’s problem debt with a new Conservative culture of responsible saving and investment?

Let me say this: it’s not inevitable that we should relive the economic mistakes of the last ten years.

A better way is possible.

We can save and invest instead of borrow and spend.

We can make our economy greener and more productive.

We can create new jobs and new sources of growth in the industries of the future.

And we can bring about a green recovery, built on world leading new technologies developed and manufactured right here in Britain.

But let’s be clear.

This green recovery won’t happen by itself.

As a result of failures of government leadership, British companies have less than 5% of the global market for green goods and services.

That’s less than France, Germany, Japan or the United States.

Government policies mean Britain is poorly prepared to take advantage of a market that is predicted to be worth hundreds of billions of pounds in the years ahead.

Instead of leading the world on green technology, Britain is trailing far behind.

So we must all take the Prime Minister’s latest announcement today on electric cars with a pinch of salt.

We all want to see more electric cars on the road, but “There is a distinct lack of detail”, in the words of John Loughead, the executive director of the UK Energy Research Centre.

It’s clear why he said that.

The Government’s announcement does not seem to include any of the crucial measures that are actually needed to make electric cars a mainstream reality.

Nothing about building a smart grid that can manage the higher demand for electricity that will result if more people are driving electric cars.

Too little on creating a national network of car charging points, so that motorists can actually drive their new electric car around the country.

The Labour plan announced today is like giving people a grant to buy an internal combustion engine, without bothering to set up any petrol stations.

And of course, there’s no detail about how any of this will be funded.

It increasingly appears that the Prime Minister is again talking about imaginary money, from an imaginary budget, being spent by Labour politicians who’ve imagined they’ve won the next election.

But why wait for tomorrow when you could start today?

What about starting this green revolution right now, in next week’s Budget?

That is precisely what we are proposing today.

Our document shows exactly how the Government could kickstart a green recovery in the Budget.

By implementing the policies we set out, the Chancellor can unleash £30 billion of private sector investment in a green technology revolution that will create jobs and opportunities across Britain.

Instead of racking up yet more debt, these policies would boost the economy by incentivising companies and individuals to build the future.

Before I hand over to Greg Clark to talk about all of our policies in detail, let me highlight three measures in particular that could be announced in the Budget.

First, our plan to make every home in Britain more energy efficient.

We would give every household a new entitlement to £6,500 of energy saving technologies.

We would provide government guarantees to enable companies to borrow the money to install this energy saving equipment in homes across the country.

This money would be repaid through savings on energy bills resulting from the improved energy efficiency.

So homeowners would be given the opportunity to have energy saving equipment fitted to their homes without any upfront costs.

Assuming just one in two homes take up the offer, this would catalyse at least £20 billion of new private sector investment, and create new jobs in every region.

Second, the Chancellor should follow our lead and announce at least three carbon capture and storage pilots.

This would not only accelerate the development of this exciting emerging technology, but it would also encourage new private sector investment in coal fired power stations, helping to address Britain’s future energy needs.

Britain could and should be exporting carbon capture technology across the world, generating new revenue streams and helping to cut carbon emissions globally.

Our policy would make that possible.

Third, the Budget should announce the introduction of feed in tariffs for our electricity grid and buy smart meters for every home.

Feed in tariffs to pay people for the excess energy their microgeneration equipment generates.

And smart meters to measure how much is being pumped back into the grid.

Together, they will create the right system of incentives to encourage millions of homes to install microgeneration technologies such as wind turbines and solar power.

As we’ve seen in Germany and countries across the world, this can not only significantly reduce carbon emissions, but it can also stimulate investment and manufacturing in emerging new energy technologies.

These policies should fit within a tax and regulatory framework that encourages investment.

But we also need to look at how we can incentivise more venture capital to build the new businesses of the future.

That’s why I announced at a speech at the Green Alliance last year that we are working with the London Stock Exchange, to set up the world’s first trading market for green technology companies.

This Green Environmental Market – or GEM – will provide new capital and opportunities for green companies from Britain and across the globe.

Again, there is absolutely no reason why Alistair Darling couldn’t also announce these policies in next week’s Budget.

Taken together, our plan could transform Britain.

It would unleash £30 billion of new private sector investment, without adding a penny to the national debt.

It would lay the path to a greener future.

And it would help build a future economy where we save and invest for tomorrow instead of borrow and spend for today.

With less than a week before the Budget, the time for action is now.

Thank you.

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